SHANGHAI – China Molybdenum (CMOC) said Chinese regulators have asked it to disclose how it will finance its $1.5-billion acquisition of Anglo American's niobium and phosphates business in Brazil.
The request comes after CMOC, one of China's largest producers of molybdenum, agreed to buy Freeport-McMoRan's stake in the Tenke copper project in Democratic Republic of Congo for $2.65-billion.
The Shanghai Stock Exchange (SSE) asked CMOC to disclose how it proposed to finance the Brazil deal, requesting details on the percentage of debt it would use and whether it would enter into framework agreements for borrowing with banks, the company said in a statement posted on the SSE on Saturday.
The SSE also asked CMOC to conduct an analysis of the impact new debt would have on financing expenses, the asset-to-liability ratio and to detail the measures the company would take to deal with resulting financial risks.
The SSE stated that the use of debt finance would cause CMOC's asset liability ratio to rise, increasing operating costs and risks.